Zeev's Turnips Patch-No Politics (ZEEV)

[fabian]

2r2d2---Without a short sqeeze it is hard to know what catalyst might propel China Small Cap stocks upward. Headwinds seen this past year will remain in place. Those headwinds include:

China raising interest rates to head off a property bubble and ensuing bust.

Allegations and strong inferences of fraud published regarding individual China Small Cap stocks.

Suspicion regarding the accuracy of numbers being reported by China SC stocks. [Restoring faith and confidence tends to be a long process and it is hard for a company to PROVE they are square shooters. That is why it takes a long time to restore confidence]

All the above have been headwinds and those headwinds will remain for quite some time.

On the other hand. Valuations reflect a strong suspicion of fraud and are generally very low. [if the company has good Governance]
We would not rule out gradual recovery on a case by case basis as time goes on if the company appears to have good corporate Governance and no fraud is proven. Sort of like yelling fire...after 10 times, no one runs if there was no fire the previous times].

The wild card for a faster than expected recovery is a short sqeeze caused by momentum traders piling on should one or two visible China SC stocks moonshot on a short sqeeze as desribed earlier. [CCME may and we stress May, be one of the first]
Momentum traders would then be looking for the next oppressed high short interest "victim" in order to lay a short sqeeze on those short.
We'll see how it goes.
Fabian